Social connections and bank deposits

Sean Flynn and Jing Wang

Journal of Banking & Finance, 2025, vol. 178, issue C

Abstract: We show that household social connections transmit shocks that influence bank deposits. We find that counties experience an increase in bank deposits when they are more socially connected to counties affected by natural disasters. This effect is not driven by physical proximity, large disasters that attract significant media coverage, or other cross-county channels, including multimarket bank branch networks, population migration, or economic connections. Banks that collect deposits in highly socially-connected counties experience high deposit volatility, but geographic diversification reduces the volatility associated with depositor social connectedness.

Keywords: Social connections; Bank deposits; Bank funding stability; Natural disasters (search for similar items in EconPapers)
JEL-codes: D10 G21 O16 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:178:y:2025:i:c:s0378426625001268

DOI: 10.1016/j.jbankfin.2025.107506

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